Worldwide tech spending to grow by more than 5%

By Helen Ku / Staff reporter

Mon, Nov 11, 2013 - Page 13

Worldwide information technology (IT) spending is expected to grow more than 5 percent to US$2.14 trillion next year, after dipping to its slowest pace of growth this year, market researcher International Data Corp (IDC) said in a report on Wednesday.

For this year, IDC forecast worldwide IT spending to increase by only 4 percent to about US$2.04 trillion, slower than last year’s 5 percent growth, due mainly to economic slowdown in emerging markets including China and Russia.

“This has been a tough year for many IT vendors, with infrastructure spending in the first half of the year proving weaker than previously expected,” IDC’s Global Technology & Industry Research Organization vice president Stephen Minton said in the report.

“The overall industry has been propped up by continued strength in mobile devices, especially smartphones, but the slowdown in emerging markets was another headwind for infrastructure-focused tech firms on top of government sequestration in the US and continued sluggish growth in Europe,” he added.

Due to continued strength in global smartphone and tablet shipments, worldwide IT spending is forecast to increase at single-digit growth this year, IDC said.

With mobile phones excluded, the growth rate may be as minimal as 0.7 percent, as global enterprises cut their spending on PCs, servers and storage products by a larger-than-expected amount, the market researcher added.

IDC said worldwide IT spending is expected to start taking off gradually in a new capital spending cycle over the next 12 to 18 months, after global shipments of commercial PCs showed tentative signs of stability during the previous quarter.

As a result, global corporate IT spending on servers, storage and networks is estimated to increase by 1 percent this year, before accelerating to a 4 percent growth next year, it added.

The report projects US corporate IT spending is to grow 5 percent this year, and West Europe to grow by 2 percent. IT spending in Japan is expected to remain flat this year, but IT spending in China will increase by 8 percent this year and 14 percent next year, it added.